The Income Tax Department has opened Form 1 on its e-filing portal for the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, providing eligible taxpayers a narrow timeframe to regularise undisclosed overseas holdings and income online, with strict criteria and deadlines.
The Income Tax Department has opened Form 1 on its e-filing portal for the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, giving eligible taxpayers a limited window to regularise undisclosed overseas holdings and foreign income online. According to the department’s portal notice, the filing path runs through the income tax forms section under “Other Acts”, and the scheme is being positioned as a one-time compliance opportunity for qualifying taxpayers.
Under the rules, declarations can be made between 16 August 2026 and 31 December 2026. Moneycontrol and Times Bull reported that the valuation date is 31 March 2026, meaning the fair market value of any asset disclosed must be calculated as at that date. The scheme applies to residents, and in some cases non-residents and resident but not ordinarily residents, provided they met the residence conditions linked to the year of the undeclared income or the year the asset was acquired.
The disclosure framework splits eligible cases into two main buckets. Zee Business reported that undeclared foreign assets and foreign income not previously taxed can be brought in if the combined value does not exceed Rs 1 crore, with tax charged at 30 per cent of the declared value plus an additional amount equal to the tax payable. It also said that a second category allows certain foreign assets with an aggregate value of up to Rs 5 crore to be declared for a flat fee of Rs 1 lakh, while anything above that limit is excluded.
After filing Form 1 with supporting documents, and valuation reports where needed, the tax authorities will issue an order in Form 2 setting out the amount due. As set out in the notified rules reported by compliedAI, taxpayers then must pay the amount and submit payment intimation in Form 3 before receiving a certificate in Form 4, which grants immunity from further tax, penalty or prosecution under the Black Money Act, 2015. The scheme does not extend to assets or income linked to crime proceeds where proceedings are already under way, including under the Prevention of Money-laundering Act, 2002.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
